What Is an Independent Financial Advisor?

Whether you want to get financial services, or you want to build specific financial strategies to meet your goals, hiring a professional and qualified financial advisor can be important life decision.

As you can understand from their name, independent financial advisors work independently as they are not bound to any organization or group. Due to this reason, clients find the services of such experts relatively trustworthy.

These experts are known to build deep, unique relationships with their clients. If you are unable to establish a financial plan, then an independent financial advisor can help.

However, you still need to know more about how financial advisors work and operate. These professionals can become extremely important for anyone, while learning how to manage your money. If you are ready to make any financial decision, your independent financial advisor can help you evaluate and analyze your decision.

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What is an independent financial advisor?

As a novice, your main interest would be to know a general definition of an independent financial advisor. Fundamentally, the independent financial advisor provides a truly independent opinion on financial products to their clients.

These experts are helpful when it comes to getting out of financial troubles. They often offer much better financial products and services that can help people improve their finances.

From determining the financial needs of clients to helping them make business decisions, these experts work genuinely. If you also want to get in touch with such an expert, you must know how they help you to develop long-term and short-term financial goals. When it comes to making various investments, they help you take the steps necessary to build and maintain your wealth.

If you are going through challenging tax situations, you can get the assistance of an independent financial advisor. Similarly, they help people to get out of estate planning issues as well as wealth transfer problems. Overall, an independent business consultant or advisor can become the support system of your financial life.

In many cases, your independent financial advisor can work as a pension advisor because they understand investing for retirement. Some even work as mortgage advisor as well.

When it comes to dealing with complex financial products like shares of stock, car insurance, mortgages, and home insurance, you might want an advisor to help you make the best selection. To increase your return while buying or deciding on these products, you only need the assistance and support of a financial advisor.

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The illusion of unbiased advice from a financial advisor

If you’re wondering about which financial advisor will provide unbiased suggestions, you should be familiar with the fee-only compensation strategy. Your financial advisor agrees to get direct compensation for the services that they deliver to you. In other words, they can cost a little bit more when you want to create an effective financial plan with them but could save money in the long-term.

The most common fee-only form is that of a consultant who is compensated based on a fraction of the portfolio they manage.

As most of the independent financial advisors are paid in multiple ways, you should understand compensation structures before choosing a professional to work with. If you can quickly identify your requirements, you can easily find unbiased advice or suggestions about investments and your financial situation from your independent financial advisor.

In any case, fee-only consultants may or may not specialize in areas the concern the decisions you want to make. That is why you must be extra careful when it comes to choosing an independent financial advisor.

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The hourly model and the commission model compensation

Fundamentally, there are two ways your independent financial advisor get paid. There are a few independent financial advisors available who can charge per hour. Likewise, several financial advisors can charge customers by commissions. This means you should know the differences between the hourly model and commission model compensation that financial advisors use.

Before you start working with a professional financial advisor, you must review the hourly model and the commission model compensation structures. By doing so, you could have a much better opinion and view about choosing an independent financial consultant that’s paid in a way you understand.

Here’s more information about these the two fee structures and why they matter:

• Hourly model

When you talk about the hourly model, you should know that the independent advisors can charge per hour. The time limit of the services your advisor performs generally depends on the seriousness of your financial situation. In many cases, there can be a high upfront cost for using a financial expert, but generally it should pay off over time.

According to some experts, you can pay an hourly fee to your financial consultants, and it can meet your needs. However, hourly fee advisors can have a few problems with their customers as they do not follow the suggestions properly.

It certainly makes some sense when you pay hourly for certain financial services. These services can become extremely necessary if you only have a few specific questions for your financial advisor.

• Commission model

On the other hand, you still have the option of choosing an independent financial advisor who is paid on the commission model. When you want to pay your financial advisor permanent commissions instead of any additional hourly payments, this can be a preferable option.

If you successfully find some financial advisors who work on the commission model, you must pay more attention to their knowledge and experience. It does not matter which kind of compensation model they offer, if you can work exceptionally well together.

For mutual funds and insurance packages, some products can be included in the financial instruments that you get through the commission-based financial consultants.

Furthermore, you can have a broker or dealer in between you and your independent financial advisor who are both compensated by the commission model. It supposedly helps financial advisors follow banking culture more to get inspired and do the analysis.

With a bit of luck, you have successfully understood the difference between the hourly model and the commission model. In addition to understanding the difference, you have now discovered the compensation of both these models. After addressing your requirements and needs, you can go for any fee-structure that suits your needs.

Finding your best independent financial advisor

Don’t stress over finding a financial advisor. Receive your copy of The Ultimate Guide to Choosing the Best Financial Advisor: For Investors with $5 Million to $500 Million in Liquid Assets and you’ll know what to look for in a financial advisor.

Choosing a business consultant or an independent financial advisor can be intimidating work, especially if you don’t have much knowledge on finances. As these financial advisors are working independently, it could be challenging to know which one will meet your needs. There can be a few financial advisors that charge per hour, and some charge commissions.

The selection process of an independent financial advisor is undoubtedly terrifying. You must identify the personality traits that you prefer in an advisor and review their qualifications. Because a financial advisor will help you save time and money, you do not want to make any mistake during the selection process.

At present, you can find thousands of independent financial advisors having the same qualifications, knowledge, and experience. That means you must think differently or creatively to know which one has the best potential to be your financial advisor.

Here are some essential suggestions that can help you more in finding the best independent financial advisor for you:

Address your requirements and needs

First, you need to address your needs or requirements because you are hiring independent financial advisors. You must choose an independent financial expert as per your needs. Without identifying your requirements, you should not go to any platform for finding a financial advisor.

Some people might need life insurance, and some might need a mortgage. To get these kinds of coverage, you must hire an expert who has more expertise in the desired field. You can either pay too much money to an independent financial advisor or be cheated by them when you are not sure about your requirements.

Acquire suggestions from family and friends

The most prominent way to contact an independent financial mentor is by using the recommendations of your family and friends. As you are the only one who has never worked with a financial adviser, your loved ones and close people to you with experience on the matter can have a much better opinion than you on their selection.

However, you cannot entirely depend on the suggestions because you must investigate financial advisors yourself. If you still think that any of your loved ones can help, you should not hesitate to receive their suggestions on hiring an independent financial advisor.

 

Qualifications

Secondly, you need to pay much more attention to the requirements of a financial advisor. You should try to work with an independent financial advisor that has a bachelor’s degree.

This expert could have a bachelor’s degree in the financial management field as well as the accounting field. It is necessary to hire a financial advisor who is useful in business, economics, statistics, and other similar finance-related subjects.

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Consider advisor pay structure

Most importantly, you must consider the pay structures of independent financial advisors you’re considering. The commission-based financial advisors could have several different pay structures. Likewise, advisors who charge hourly can have their pay structures a bit different than the commission-based advisors.

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Re-evaluate personality traits

When you are ready to work with the best financial advisor, you should review their personality traits at least once or twice. Whether it is about having a proactive approach or having a holistic vision of your finances, they have several enormous qualities or traits that make them different.

You can find a few financial advisors who love to work with a support team. The invoked confidence and good market reputation are other personality traits that you should look for in a financial advisor.

Despite these necessary qualities, you can expect your financial advisor to have improved networking skills. They should also have superior organizational expertise and abilities. An essential personality trait of a financial advisor is their aptitude to handle rejection.

Check their background

Now, it could be the best time for you to verify the overall experience of your financial advisor. It means you must reconsider the working of a financial advisor with a company. At this present moment, there are several tools and mediums available that you can use to check the background of a financial advisor.

For example, you can use the internet to find most of the details of an independent financial advisor. If you are an independent financial advisor and are famous and recognized, they will have a superior background.

Learn more about comparing financial advisors using this resource from Pillar Wealth Management, LLC. titled, The Ultimate Guide to Choosing the Best Financial Advisor: For Investors with $5 Million to $500 Million in Liquid Assets.

Online reviews and testimonials

In this present era of the internet, you do not need to try more to find a dependable financial advisor. Today, you can visit the official websites and web pages of these financial advisors. By visiting the official website of a financial advisor, you learn about their services, quality, and price.

Likewise, you will surely get more details about the professionalism that an independent financial advisor can provide in their services and products. To utilize this particular benefit, you can look at the testimonials and online reviews from their existing and previous clients.

Personal meetings

Finally, you can decide on meeting your independent financial advisor personally once or twice before hiring them. Individual sessions can give you a much better opinion about your advisor’s qualities and other good things. You can know the hidden traits of financial advisor through personal meetings.

Using the criteria mentioned above, it would be much easier for you to contact the best independent financial advisors. Before you hire any independent financial advisor, you must go through the tips above to have the best likelihood to find one that matches your needs.

Would you like help finding an exceptional financial advisor? If you have $5 million to $500 million in wealth that you need managed, schedule your no obligation consultation with Pillar Wealth Management, LLC.’s co-founders Hutch Ashoo and Chris Snyder today.